Tag Archives: finance

ESG, Crypto, And What Has The IRS Got To Do With It?

By | September 26, 2022

Despite their volatility and the many regulatory challenges that cryptoassets presents, they continue to be adopted by institutions and individuals alike, with some of the world’s largest organizations, ranging from Wall Street banks to U.N. institutions, allocating resources to the space. As exciting as crypto assets may be, however, no singular technology or financial instrument… Read More »

Millennials and GenZ’ers Have Only One Lifetime to Change the World with Their Investments

By | September 23, 2022

Millennials and GenZ’ers are perceived to have a reckless mentality and adopt a careless attitude toward life decisions, including investing. The reality, however, is that Millennials and GenZ’ers recognize they only live once and they want to make an impact in the lives that they live. They are committed to creating powerful and positive changes… Read More »

The Pollution Premium

By | September 22, 2022

While industrial pollution is widespread in the modern world and affects everyone’s life, whether it influences the returns on stock investors is an important yet underexplored issue. In our recent paper, we attempt to examine why and how industrial pollution affects expected stock returns using both modeling and empirical approaches. Polluting firms may save costs… Read More »

Abnormal Investment and Firm Performance

By | September 15, 2022

In an efficient capital market, firms with better future growth options usually have higher equity valuation. To exercise these growth options, firms with a higher market valuation should have a lower payout ratio and invest more on projects with positive net present value (NPV). However, one study indicates a negative correlation between capital expenditures and… Read More »

The Role of Employees as Information Intermediaries: Evidence From Their Professional Connections

By | September 14, 2022

Information intermediaries provide or transmit useful information to other parties in the capital market, either because (i) it has not been publicly released, or (ii) it has not been widely disseminated. Therefore, information intermediaries influence a firm’s information environment. For example, institutional investors and analysts help incorporate more earnings-related information into prices during the pre-announcement… Read More »

Blockholder and CEO Wealth-Performance Sensitivity

By | September 12, 2022

Firm owners do not run the firm. Instead, they delegate the job to managers with expertise. Such delegation inevitably gives rise to the misalignment of interests between the firm owners and managers, as the latter do not share the benefits of the firm’s success as much. Shareholders, who are the firm owners, thus need to… Read More »

Corporate Directors Learn from Environmental Shareholder Engagements

By | September 8, 2022

Institutional investors are increasingly worried about their portfolios’ exposure to environmental risks. For example, heat waves cause a decrease in worker productivity, resulting in lower revenues and operating income, and the regulation of externalities, such as carbon pricing, affects the value of polluting firms. A global survey indicates institutional investors believe environmental risks have financial… Read More »

How does ETF redemption work, and what are economic impacts? 

By | September 6, 2022

Corporate bond exchange-traded funds (ETFs) have been increasing rapidly and becoming an emerging financial instrument in the past two decades. They allow investors to build low-cost bond portfolios. Investors can adjust positions in real-time instead of trading corporate bonds over the counter or investing in bond mutual funds with minimums and limits. With ETFs targeting… Read More »

Clarification or Confusion: A Textual Analysis of ASC 842 Lease Transition Disclosures

By | September 5, 2022

In our recent paper, we study the textual meaning of the financial statement transition disclosures in firms’ filings with the Securities and Exchange Commission (SEC) explaining the likely effects of the adoption of Accounting Standards Codification (ASC) 842 on leases. Under President Franklin Delano Roosevelt, Congress established that the SEC’s backbone be based on a sufficient… Read More »

How Does Deleveraging Affect Funding Market Liquidity?

By | August 31, 2022

Financial institutions are highly leveraged due to the extremely low interest rates of the past decade. However, interest rates are now rising worldwide due to inflationary pressures, which can lead to plunging stock markets and significant deleveraging of financial institutions. Policymakers, academics, and practitioners are concerned about the impact of deleveraging. In our recent paper,… Read More »